PRUDENTIAL TO PULL OUT OF NON-LIFE BROKER MARKET

PRUDENTIAL TO PULL OUT OF NON-LIFE BROKER MARKET

Prudential Corp., the biggest British insurance company, will stop accepting non-life business from insurance brokers because "fierce competition" has made the business uneconomic, Mick Newmarch, Prudential chairman, said Tuesday.

The company revealed it lost $132 million (UK77 million) on general insurance business sourced by brokers in 1991. This was the main black spot in Prudential's 1991 results, which showed a 9 percent growth in pretax income to UK267 million.Withdrawing from the non-life broker market will cost the company a further UK53 million and 400 jobs. However, Mr. Newmarch insisted that the firm had come to the "inescapable conclusion that we should withdraw from this sector of the market altogether."

Prudential's general insurance broker division was established in 1987 to underwrite small and medium-scale commercial lines business provided by brokers.

Gross revenue premiums in 1991 were UK225 million. The closure of the operation is likely to refocus attention on Mercantile & General Reinsurance, Britain's largest reinsurer, which also is owned by Prudential.

Mercantile & General broke even in 1991 thanks to its life reassurance business, despite losses of more than UK70 million on non-life business. Brokers in the London market have long speculated that Prudential would be glad to sell Mercantile & General Re if the right offer came along.